The true value of compost: Expanding new markets and the potential of this resource
Rodney Tyler
How do you increase the perceived value of compost produced from waste, and create more uses for it? It requires innovative thinking, but also an awareness of what the alternatives to that compost would really cost
by Rodney Tyler
Successful business practices within the waste sector obey rules that apply elsewhere too. Sales departments function to sell what businesses have. And marketing is used to create what people want. Such rules are important to remember, not least to ensure that customers understand the value of the by-products produced. Taking compost as an example, so far our industry has largely struggled to embed an appropriate level of perceived value in the target market. One can picture the scene…
A likely customer runs his fingers through some compost. Although he may not be an expert gardener, you can hear him say ‘Wow, this is beautiful stuff!’ But what criteria is he using for this judgement?
For centuries, humans have known the value of good soil, good water and good humus. Just as the past 20 years have been filled with advances in the composting process, so now the next 20 years need to point towards further understanding all the benefits besides how compost feels in our hands.
Standard markets
Traditional approaches to marketing compost, assuming a quality product, centre on large annual users of compost who use the product on a routine basis, for example topsoil blenders who use compost in preparing their mixtures. As a result, compost marketers recognized the replacement value for compost is similar to topsoil. However, replacement valuation, when it first occurred, was errant in not placing an adequate value on compost. To this end, the topsoil blender marketplace has been chained to traditionally low prices, because people say that compost replaces ‘dirt’.
In the history of marketing, replacement values have been used for years to establish key value relationships, buying habits, price elasticity and other key elements of successful programmes. For instance, consider the different in price you would be willing to pay for a horse and buggy as opposed to a car? Just as transportation has allowed the value of convenience to identify the value of its commodity (vehicles), so the compost industry must use the value of the environment to ensure an appropriate price and value for compost. In the future, environmental valuation of using compost is the compost industry’s transportation to higher value in its products.
Most readers are well aware that 35 years ago, potting mixes were not a common place for compost. However, today most potting mixes contain varying ranges of compost. And instead of US $5 or $10 per cubic yard, these more specialized blends cost the customer up to $30 per cubic yard and higher, due to demonstrated effectiveness at reducing disease and increasing plant productivity. The value link enabled the composter to charge more for that particular product, even if it were composted bark.
As most composters look for more and more places to sell their products and develop demand, normally, topsoil blenders, nurseries, garden centres, retail outlets, and agriculture are all considered as ‘natural targets’. Most of these are local, but the replacement costs in each sector are arguably undervalued. None of these markets has given any value for helping the environment, per se, nor is there a fair price to place on that category of value. However, new markets within the environmental sector have tremendous opportunity to make that connection and assist in clarifying environmental benefits (value) within existing traditional markets. What is the highest and best use for your compost and how do you maximize a strategy to make sure you select the proper channels, diversification and strategy?
New markets – the environmental connection
The early 1990s began with the development of new research on compost use. As more research was completed, the US Composting Council and other leading organizations began establishing guidelines for use of compost in those ‘normal’ markets, based on peer reviewed research. Since those markets were not yet saturated, other environmental work was not yet needed.
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FilterSoxx can be used for a range of environmental applications. Here it is being employed as a new form of silt fence to prevent erosion and escape of sediment from a construction site. The mesh tubes are easily removed, leaving the compost in place
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Filtrexx International LLC began doing demonstration projects in the mid and late 1990s, inspired by a consulting background and eagerness to satisfy customers who wanted to diversify their compost marketing programmes. When Filtrexx first conducted market research about using compost for erosion control, wetland establishment and other market sectors that had potential for gobbling up huge annual quantities of compost, it was very hard to link clearly price and value. Filtrexx products are now being used on over 15,000 projects via 90 certified installers in the US, Canada, Japan, Australia and New Zealand; this suggests that things are starting to change.
Erosion control
The most common form of sediment control in the field of erosion control is a silt fence. This is a black geotextile fabric used to try to stop sediment from leaving construction sites, and is normally installed using wood stakes. The fabric is trenched in and stapled to the stakes as a curtain to stop contaminated water flow. Targeting this market sector, Filtrexx invented FilterSoxx (or FilterSocks), which are mesh tubes used to contain various types of composted products. The FilterSoxx can be put to various environmental uses, the most recognized of which is sediment control i.e. to be used instead of traditional silt fences. One important advantage of FilterSoxx is the ease with which the mesh tubes are removed, leaving the compost behind. Silt fence removal is more difficult and is more disturbing to the soil. The latter option is also more costly when one includes all installation, maintenance, removal and disposal stages; n.b: many of the uses for FilterSoxx are covered under one issued patent and several pending patents.
The key to unlocking value here has been that, instead of replacing soil, the compost product replaced something from outside of the conventional organics industry. By replacing the value associated with silt fencing, Filtrexx was able to establish a new value for compost used for this new purpose and retain the customer’s willingness to spend about the same or slightly more, but with better results. This has equated to a compost value of well over US $20–40 per cubic yard i.e. not dirt cheap.
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The filled tubes have many applications, not least in preventing erosion from unstable slopes and from construction sites. FilterSoxx give a new value to compost by using it for a new purpose
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As Filtrexx research continues to expand today, other applications include heavy metal removal, environmental remediation of contaminated sites, green walls, streambank stabilization, nutrient management, emergency response and fire recovery. Those applications, with a number of other admixtures and additives that use the compost + mesh system as a carrier, can return well over US $300–500 per cubic yard.
The biggest challenge remaining for Filtrexx – which would apply to the manufacturer of any other new type of product using compost – is to demonstrate to a widespread audience the effectiveness of its product and collate and distribute evidence that backs up the company’s claims. This is particularly a challenge when funds are limited during startup of the business, and when the marketing of key data might generate competition for the company.
A case study from Minnesota
The State of Minnesota encountered a situation in 2002 which required steep slopes to be vegetated in a sensitive area next to a bridge. Further erosion of the slopes would potentially jeopardize the structural integrity of the bridge and cause environmental contamination of some high quality watersheds downstream. The Minnesota DOT (Department of Transportation) opted to specify Filtrexx Compost Blankets and Filtrexx Silt Soxx to be used in combination for slope stabilization, vegetation establishment and reduction of runoff. The project had previously been attempted twice with other technologies that could not grow adequate vegetation for permanent establishment. Note – this is the big message for the compost industry. Compost grows vegetation better than any other element out there, bar none. So when those faced with marketing compost consider any of the markets discussed here, it is important to remember that advantage, and equate a value to it during pricing and valuation sessions. It is vital to place a proper price on value delivered.
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Certified Filtrexx installers from Windscapes work on a steep incline during a Filtrexx compost blanket and FilterSoxx project installed on a Minnesota Department of Transportation project.
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In the Minnesota case, if Filtrexx would have charged a replacement cost for the compost used (one time application) with the other attempts that failed (two applications that were much more expensive), they would have returned values to compost in excess of US $300 per cubic yards. The project was completed with estimated values at near $100 per cubic yard. Note that this example does not take into account the improved environmental benefits and values associated therein.
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The slope was so steep that installers needed repelling gear to tie off for safety. Compost helped get vegetation established at this site where a number of other products had previously failed
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Retrofit markets, remediation, stormwater management
There are about 10,000 parking lots in the City of Boston. One can only imagine how many there are in other great cities of the world…London, Paris, Rome. As the parking lots continue to collect nasty pollutants, like heavy metals and hydrocarbons, cleaning up that parking lot runoff is a tough problem. Compost can help to answer those retrofit problems, at prices that no other products can compete with – if, and only if, it is properly marketed, properly valued, and properly priced.
For instance, Filtrexx is currently investigating cartridge type systems that will allow a FilterSoxx product to be place on curb edges, encouraging filtration of pollutants like heavy metals and hydrocarbons. These would be replaced on some interval, creating an annual demand for compost at a high valuation index. Early data from United States Department of Agriculture (USDA) in Beltsville, Maryland indicates Filtrexx products that use composted materials can degrade hydrocarbons and release cleaner water by turning the hydrocarbons into CO2 and water. Action of this filter occurs in three ways:
- physical trapment
- chemical fixation
- biological breakdown from the ‘bugs’ in compost.
Data about hydrocarbon breakdown using compost have been known for some time, but tools to harness this knowledge are only now emerging.
Conclusions
Compost use helps to mimic nature, minimize impacts from man-made activities and return sites to conditions similar to preconstruction hydrologic conditions. Compost minimizes negative impacts from human activities while bandaging the earth and repairing it. Managing and understanding this living system contrasts with most ‘concrete’ man-made alternatives. If we can harness the power of nature, we can drastically change the way future resources are viewed and help determine how they are valued.
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Hydrocarbons are a common pollutant worldwide. Installation of products like a FilterSoxx around the perimeter of the parking area or around storm inlet drains would allow compost contained inside to filter the hydrocarbons and provide a clean-up solution. Applications like this are a good value for compost and can be palletized and shipped abroad, from a single production point, similar to bagged compost
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For composters to have a predictably solid future, they will need to have some mechanism of managing how wastes are viewed and valued. After all, it is this ‘waste’ that should actually be considered a resource, and using appropriate titles therein denotes completely differing values. But managing the flows of compostables, with all potential competition, would only be successful if composters know their markets and can use them as an asset. No other competing entity for this ‘waste’ stream has the ability to develop value-added products like composters. Concerns for flow control, hauling contracts, landfill space and many other competing factors are mute if composters ‘could’ buy their resources.
The challenge in front of us all is to develop the markets at a pace that does not cause devaluation in the markets via product dumping, free give-aways, or glut tactics used purposefully to influence compostable flows. Since environmental impact is a truly global issue, all of us in the compost industry should be in favour of increasing the collective value. What other options of waste management (resource management) have the proven ability to deliver US $300 per cubic yard? Exhaust opportunities for these market sectors first, then move toward options that are less valuable in order to truly achieve the ‘highest and best use’
Rodney Tyler is Founder and CEO of Filtrexx International LLC., USA.
e-mail: rodt@filtrexx.com
Linking compost to climate change – what is your carbon footprint?
The past two years have seen a meteoric rise in interest over global warming and carbon cycles. And the trading of carbon credits offers proactive companies a mechanism to commit to a greener, more sustainable future. Composting should be a centrepiece in this discussion. Its role in the management of climate change has numerous facets, including links with carbon credits, carbon sequestration, the reduction of greenhouse gas emissions, an increase in available water, a reduction in desertification and stormwater management. However, the metrics for accurately predicting its long term benefits to the environment are only now being tabulated. How much water can an inch of compost hold? How much less do you have to water if you use compost? What is the quality of the water leaving that amended area compared to alternatives? In nearly each and every case, the answer is good, better and best, but most of all, it is hard to find an acceptable substitute for compost that does all these things, for the price currently being charged for compost. ‘It does all that for US $5 per cubic yard?’
These new environmental links allow compost to be viewed in a proper light, not as a commodity to ‘get rid of’ when it piles up out back, but something to manage demand for, as value increases. If development plans for revamping of societies’ antique infrastructures allows compost to be properly valued, then it may finally shift away from a waste management paradigm to a product manufacturing paradigm.
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